Annual General Meeting 25 March 2011 Welcome at the Annual General Meeting of BankNordik

1. Annual General Meeting 25 March 2011Welcome at the Annual General Meeting of BankNordik

2. Disclaimer • This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements. • No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, none of BankNordik, or any of its principal shareholders or subsidiary undertakings or any of such person’s officers or employees or advisors accept any liability whatsoever arising directly or indirectly from the use of this document

3. Agenda • The Board of Director’s report on the Bank’s activities in the past year • Submission of audited annual accounts for adoption and Annual Report 2010 • Decision on distribution of profit in accordance with the adopted annual accounts • Election of members to the Board of Directors • Election of auditor/auditors • Proposals from the Board of Directors Proposals from the Board of Directors a. Winding-up scheme referred to in the Danish Act No. 721 of 25 June 2010 b. Authorization to the Board of Directors to let the Bank acquire own shares • Miscellaneous Slide 3

4. 1. The Board of Director’s report on the Bank’s activities in the past year Presented by Klaus Rasmussen, Chairman of the Board of Directors Slide 4

5. 2010 – A year of transition “Our major strategic tasks in 2011 will be to create profitable growth in lending while maintaining a low risk level in our loan portfolio and a cost efficient operation.”

6. Presentation of the audited annual accounts and the Annual Report 2010 Presented by Janus Petersen, CEO Slide 6

7. Annual Report 2010 was made public on 7th March 2011 and has been available at: • www.BankNordik.fo/IR • BankNordik’s Head Office in Tórshavn • Has been sent to the shareholders’ who have requested it Slide 7

8. Strategic milestones reached in 2010 • International expansion achieved by the acquisition of Danish and Greenlandic branches • Change of IT platform from local to Nordic IT provider • Successful exit from Bank Package I Slide 8

9. Highlights: Record high profits, large non-recurring items and large dividend expected in 2012 • Profits before tax in 2010 DKK 416m • Impairments DKK 167m (+) • Other income (Bakkafrost) DKK 380m (-) • Other Cost (Bank Package I and II) DKK 62m (+) • Non-recurring cost DKK 30m (+) • Value adjustments DKK 20m (-) Total adjusted profits before tax in 2010 DKK 275m • Profits before tax forecast 2011 DKK 100-140m • Net profits in Q4 2010 DKK 43m • Proposed dividends 2011 DKK 40m • Payment of accumulated dividends postponed to 2012 DKK 95m Slide 9

10. Pre tax profit Forecast: DKK 150-190m Adjusted: Q1 DKK 470-510m Q3 DKK 360-400m AR 2010 result : DKK 416m Income from net insurance activities Forecast: Increase 25-40% Adjusted: Q3 20-30% AR 2010 result : 31% Net interest and fee income Forecast: Growth 40-45% Adjusted: Q1 25-35% Q3 20-30% AR 2010 result: 29% Impairments Forecast: Same nominal level, decrease in FO, some impairments in DK/GL Adjusted Q3: DKK 180-200m AR 2010 result: DKK 167m Costs Forecast: Increase by 70-75% AR 2010 result : Increase by 87% Adjusted* 74,8% *(excl. non-recur. Cost DKK 30m) Bakkafrost Divestment completed 2010 results deviate from forecast primarily due to divestment of Bakkafrost and increased impairments Slide 10

11. Key figures in AR 2010 • Net interest and fee income incl. insurance grows by 30% driven by acquisitions • Costs almost doubled driven by acquisitions and IT conversion • Impairments were significantly higher primarily in Q3 related to lower values of collateral • Net profit trebled because of divestment of Bakkafrost • Loans and advances grew by 25%, while deposits grew by 61% Slide 11

12. Key figures in Q4 2010 • Interest and fee income incl. insurance decreased due to funding costs and non-performing loans • Costs higher due to extraordinary items • Impairments – corrections and Amagerbanken • Net profit turned positive again due to lower impairments • Loans and advances stable, while deposits fell Slide 12

13. Increased NII driven by interest margin and acquisitions Acquired branches compensate for reduced income on the Faroe Islands A steady growth in interest margin in the last 5 years In Q4 2010 NII decreased due to higher funding costs (DKK 5m) and corrections related to non-performing loans (DKK 30m) *Previous GAAP Slide 13

14. Fees and insurance income on a higher level in 2010 than in 2009 due to acquisitions • Higher level of fees in Q4 2010 explained by a year-end correction of DKK 10m • Higher level of insurance income in 2010 explained by first full year consolidation of Icelandic insurance activities Slide 14

15. Operating segments, banking • Growth potential in Denmark • Staff costs and adm. expenses in Denmark high compared to income • Impairments in Faroe Islands increased primarily due to re-valuation of collateral in Q3 2010 Slide 15

16. Operating segments - insurance • Successful business model on the Faroe Islands • Improving results from Icelandic activities Slide 16

17. Cost structure changed significantly • Staff doubled in acquisitions causing increased costs • DKK 30m in one off costs (change in IT provider, name change, acquisitions) • Renewed focus on optimizing cost structure Slide 17

18. Loans and advances • Geographical diversification achieved • Danish and Greenlandic activities compensate for a decrease in Faroese lending level Slide 18

19. No sector larger than 9% Sound risk diversification Slide 19

20. Large liquidity in 2010 due to end of Bank Package I Slide 20

21. The Supervisory Diamond Sum of large exposures < 125% BN 22.8% Loan growth < 20% BN 25% Funding-ratio < 1.25 BN 0.71 Property exposure < 25% BN 11% Excess liquidity > 50% BN 292,9% Slide 21

22. Strategic focus areas 2010-2013 • Focus on selected customer segments, pension and insurance • Training and recruitment of employees • Optimizing business processes and organization • Optimizing liquidity and capital structure • Risk management and customer credit rating Slide 22

23. Outlook 2011 • Focus on C/I ratio and efficiency – cost reduction materializing in the coming tree years • Cost reduction 0-5% in 2011 • Pre-tax profit before value adjustment DKK 100-140m • Net interest, fee and insurance income is expected to decrease in the range of 0-5% because of pressure on the interest margin • Impairments DKK 50-100m Slide 23

24. 2 and 3. Submission of audited annual accounts for adoption and Annual Report 2010 and decision on distribution of profit in accordance with the adopted annual accounts Slide 24

25. The Board of Directors proposes that the General Meeting adopt the annual accounts as presented in the Annual Report 2010 and approve the allocation of the DKK 339,435,000 net profit as follows: DKK 40,000,000 are paid out as dividend to the shareholders, DKK 294,176,000 are allocated to “Retained earnings” and DKK 5,258,000 to “Minority interests”. Slide 25

26. 4. Election of members to the Board of Directors Slide 26

27. Slide 27

28. 5. Election of auditor/auditors Slide 28

29. The Board of Directors proposes re-election of NOTA, Løggilt grannskoðanarfelag P/F and PwC Denmark as external auditors. Slide 29

30. 6. Proposals from the Board of Directors Slide 30

31. a. Winding-up scheme referred to in the Danish Act No. 721 of 25 June 2010 • In 2011 the General Meetings of all Danish and Faroese banks are required to decide on the possible future use of the Danish State’s winding-up scheme administered by Finansiel Stabilitet A/S. • In case a distressed bank does not comply with the Financial Business Act’s capital adequacy requirement and the bank has been given a deadline by the Danish FSA to comply with this requirement, the distressed bank may choose to be wound up under the Finansiel Stabilitet A/S. Finansiel Stabilitet A/S will then set up a subsidiary company to take over all assets of the distressed bank. • BankNordik's Board of Directors proposes that, in line with the majority of Danish banks, that the General Meeting state that it does not want at present to consider to be wound up by Finansiel Stabilitet A/S under the Act on Financial Stability - in other words that the General Meeting decide not to decide on whether they will use the scheme or not. Slide 31

32. b. Authorization to the Board of Directors to let the Bank acquire own shares • The Board of Directors requests that the General Meeting renews, until the next ordinary general meeting, the following authority to allow the Bank to acquire its own shares: “The General Meeting authorises the Board of Directors – until the next Annual General Meeting – to permit the Bank – by way of ownership or pledge - to acquire own shares up to a total nominal value corresponding to 10% of the Bank’s share capital in accordance with Article 48 in the Companies Act. When the Bank acquires own shares by way of ownership, the share price shall not deviate from the market price by more than 10%.” Slide 32

33. 7. Miscellaneous Slide 33

34. Thank you for attending BankNordik’s Annual General Meeting 2011